International Trade

In an increasingly interconnected world, few businesses can ignore the global trading environment. Whether a firm exports, imports, competes with foreign producers or sources materials internationally, the rules and dynamics of international trade profoundly shape its strategic position. This lesson covers the second part of AQA specification topic 3.7.5.

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Why Countries Trade

International trade allows countries to specialise in producing goods and services where they have a comparative advantage — meaning they can produce at a lower opportunity cost than other countries. Trade increases total output, provides consumers with greater variety and lower prices, and gives businesses access to larger markets and cheaper inputs.

Benefits of International Trade for Business